Made in the USA: More than Just Words
for the Federal Trade Commission

Over the past few decades an increasing number of U.S. manufacturers
across all industries have moved production offshore, making the term
“made in the USA” one in which many in this nation take pride. But what,
exactly, does this mean—and what does the Federal Trade Commission (FTC)
require when it comes to this term?

The FTC’s “Made in USA” Act was designed to give the agency
“the power to bring law enforcement actions against false or misleading
claims that a product is of U.S. origin.” The Act requires that in order
for a product to be labeled or advertised as “Made in USA” that it be
“all or virtually all” made in the U.S. According to the FTC, “all or
virtually all” means that all significant parts and processing that go
into the product are of U.S. origin and the product should contain no
— or negligible — foreign content.

The FTC also reports that the product’s final assembly or
processing also must take place in the U.S. “The Commission then considers
other factors, including how much of the product’s total manufacturing
costs can be assigned to U.S. parts and processing, and how far removed
any foreign content is from the finished product,” reports the FTC. “In
some instances, only a small portion of the total manufacturing costs
are attributable to foreign processing, but that processing represents
a significant amount of the product’s overall processing. The same could
be true for some foreign parts. In these cases, the foreign content (processing
or parts) is more than negligible, and, as a result, unqualified claims
are inappropriate.”

The Act applies to U.S. origin claims that appear on products
and labeling, advertising and other promotional materials, along with
electronic marketing. The FTC notes that claims can also be expressed
or implied. For example, using U.S. symbols, such as the flag or references
to the location of a company’s headquarters, could imply a claim of U.S.
origin, according to the FTC.

The FTC also addresses the manufacturing process—and how
far back manufacturers should look before making such claims.

“To determine the percentage of U.S. content, manufacturers
and marketers should look back far enough in the manufacturing process
to be reasonably sure that any significant foreign content has been included
in their assessment of foreign costs,” according to FTC. “Foreign content
incorporated early in the manufacturing process often will be less significant
to consumers than content that is a direct part of the finished product
or the parts or components produced by the immediate supplier.”

When it comes to raw materials used in a product, the FTC
looks at “how much of the product’s cost the raw materials make up and
how far removed from the finished product they are.”

FTC also notes that the act also addresses qualified claims
(i.e. “a product is of 60 percent U.S. content.”

“A qualified ‘Made in USA’ claim describes the extent, amount
or type of a product’s domestic content or processing; it indicates that
the product isn’t entirely of domestic origin,” writes FTC.

Companies should stick to qualified ‘Made in USA’ claims
“when a product includes U.S. content or processing but doesn’t meet the
criteria for making an unqualified Made in USA claim,” according to FTC.

“Because even qualified claims may imply more domestic content
than exists, manufacturers or marketers must exercise care when making
these claims,” adds the FTC. “That is, avoid qualified claims unless the
product has a significant amount of U.S. content or U.S. processing. A
qualified Made in USA claim, like an unqualified claim, must be truthful
and substantiated.”

The FTC is not the only organization honing in on the importance
of legitimately stating “made in the USA.” This includes the program,
Made in USA Certified®, the only registered “Made in USA Certified” Word
Mark with the U.S. Patent and Trademark Office, according to the organization.

“When we say it’s ‘Made in USA,’ you can count on it,” says
Julie Reiser, president and co-founder.

Any company bearing one of the USA-C™ seals has gone through
a rigorous supply chain audit to ensure that the product and processes
originate in the United States of America.

The designation is an independent certification system that
applies proprietary audit criteria consistently across companies, and
criteria are checked through the company’s supply chain. “The seal says
the company has committed to American jobs and to the American economy,”
says Reiser. “Displaying the seal gives consumers the option to visibly
support products and services of the USA.”

The Earthwise Group LLC, a national network of locally owned,
independent manufacturers of doors and windows, announced that the organization
has recently been recognized as “Made in USA Certified.” The organization
is the first and only door and window manufacturer to be Made in USA Certified,
according to Earthwise.

Why did they do it? “Number one it’s the right thing to
do,” says Mark Davis, executive director, the Earthwise Group. “We have
to invest in the American economy, American worker and American jobs.
If our economy is going to turn around we have to be more sensitive in
investing, and that means ingesting in American products.”

Reiser agrees. “It says a lot about a company’s willingness
to remain transparent. For companies it’s a powerful branding tool to
distinguish among those who may be making false claims,” she says.